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Baxter International (BAX): Stock With Unusual Social Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified
Baxter International (
BAX) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Baxter International as such a stock due to the following factors:

BAX has 18x the normal benchmarked social activity for this time of the day compared to its average of 4.77 mentions/day.

BAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $224.5 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

Baxter International Inc. develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma, and other chronic and acute medical conditions. The stock currently has a dividend yield of 2.9%. BAX has a PE ratio of 18.4. Currently there are 4 analysts that rate Baxter International a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Baxter International has been 3.6 million shares per day over the past 30 days. Baxter International has a market cap of $39.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.53 and a short float of 2.3% with 4.12 days to cover. Shares are up 5.6% year-to-date as of the close of trading on Wednesday.

TheStreet Quant Ratings rates Baxter International as a
buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Net operating cash flow has increased to $1,083.00 million or 14.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.40%.

The gross profit margin for BAXTER INTERNATIONAL INC is rather high; currently it is at 55.24%. Regardless of BAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.46% trails the industry average.

BAXTER INTERNATIONAL INC's earnings per share declined by 33.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BAXTER INTERNATIONAL INC reported lower earnings of $3.65 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $3.65).

In its most recent trading session, BAX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.